KUALA LUMPUR (June 25): Malaysian palm oil futures were little changed on Wednesday, after rising to their highest in nearly a month in early trade, as risks of disruptions to Iraq's oil supply eased, although a small rise in export data lifted hopes of a recovery in demand.

The benchmark September contract on the Bursa Malaysia Derivatives Exchange stood at 2,482 ringgit ($770) per tonne by Wednesday's close, flat from Tuesday's session. The contract earlier rose to its highest since May 28, and traded between 2,481 ringgit and 2,511 ringgit.

A report from cargo surveyor Intertek Testing Services, showed that exports of Malaysian palm oil products during June 1-25 inched up 3 percent to 1,126,927 tonnes, compared with a month ago, the first rise this month, thanks to slightly better demand from India and China.

Another cargo surveyor, Societe Generale de Surveillance, reported that exports for the same period rose only 0.4 percent. Market players said that prices were also supported by earlier gains in soyoil markets.

"The firmer tone in soybean oil and underlying support in crude oil are both providing support to crude palm oil," said a trader with a local commodities brokerage in Kuala Lumpur.

"The palm market is ignoring the local bearish fundamental, which is the fast rising end-stocks in the coming months ... Instead, it is following crude and soybean oil," the trader said.

Total traded volume on Wednesday stood at 36,373 lots of 25 tonnes, above the average 35,000 lots.

Technicals showed that palm oil may rebound into a range of 2,639-2,704 ringgit per tonne, before resuming its fall towards the June 12 low of 2,362 ringgit over the next three months, according to Reuters market analyst, Wang Tao.

Brent crude oil slipped below $114 a barrel on Wednesday, as fears of supply disruption in Iraq receded and after a rise in U.S. inventories pointed to ample stockpiles for the world's biggest oil consumer.

Oil prices have spiked in the wake of the Iraqi conflict over the past two weeks, making palm oil a cheaper alternative to produce biodiesel and fuelling a more than 2 percent rise in palm prices so far this month. Indonesia, the world's biggest palm grower, could miss production and export targets this year, due to the effects of the crop-damaging El Nino weather pattern, according to an industry official.

"Production is estimated to decline, because of El Nino impact which triggered drought, and forest and plantation fires," said Sahat Sinaga, executive director of the Indonesian Vegetable Oil Industry Association.

He estimates Indonesia's palm output at 27-28 million tonnes for 2014, 10 percent below earlier forecasts, and that the export target of 21.37 million tonnes will unlikely be reached.

"During the first half of 2014 alone, export of CPO and its derivative products were only 9.8 million tonnes — far below the target," Sinaga said.

"Export realisation by the end of the year is estimated (at) only 18-19 million tonnes or around 85 percent of the target."